London Hotel Sponsor Nabs Loan Extension on Cayman Islands Resort
By Andrew Coen May 2, 2023 4:16 pmreprints
London & Regional Hotels (L+R) has secured an extension for a commercial mortgage-backed securities (CMBS) loan on its beachfront Grand Cayman Marriott Resort property in the Cayman Islands, Commercial Observer has learned.
The hotel was hit hard by restrictions put in place during the COVID-19 pandemic.
The London-based global real estate investment firm received a three-year extension for its $80 million CMBS refinance loan supplied by Cantor Commercial Real Estate in 2017 that matured in July 2022. The extension to July 2025 on the fixed-rate debt is geared toward enabling the hotel to stabilize its cash flow and deploy fresh equity to renovate the property after it experienced major drops in visitors due to strict Cayman Islands COVID-19 travel rules that were in place from March 2020 to April 2022.
“The Caymans came back late because of a very restrictive entrance policy for tourism into 2022, and this place was running at a severely impacted occupancy rate,” said Richard Fischel, partner at Brighton Capital Advisors (BCA), a CMBS advisory firm that negotiated the extension with the loan’s special servicer, Midland Loan Services. “This was driven by the COVID tail and how the Caymans and various other islands in the Caribbean handled tourism.”
Fischel added that while visitor levels have bounced back significantly at the hotel in the past year, the numbers are still below what would be needed to obtain a takeout loan, especially in a rising interest rate environment.
Michael Cohen, managing partner at BCA, noted that his firm stressed to the special servicer the rationale behind the extension request including L+R’s plan to invest new equity in the property and its strength as a sponsor. The extension request involved BCA reviewing and integrating the hotel’s operating data along with its future growth projections.
“With BCA as our advocate, we obtained a satisfactory resolution to what otherwise could have been an inefficient and time-consuming workout,” Adrian Bradley, finance director at L+R, said in a statement.
Officials at Cantor Commercial Real Estate did not immediately return a request for comment.
Andrew Coen can be reached at email@example.com